Monday, June 07, 2010

Health Law Likely to Add to Employer Costs

Employer health care costs will likely rise by 7-8% in 2011 due to the health care reform law enacted by Congress back in March. Employees may see a rise in deductibles and co-pays to offset this increase. According to Kiplinger.com, the anticipated savings will probably take five or more years to realize. That’s when insurance exchanges and other measures will start to take effect.

What’s making costs rise for employers? Covering kids until age 26 is a big contributing factor. The elimination of lifetime benefit caps and unforeseen bookkeeping problems also will not help. With older kids being covered now, companies might not be able to charge any surcharges by law, but more firms will get around that by charging more for say, a family of 6 than for a family of 4. Deductibles and co-pays may go up as well like I explained above, to help employers counterbalance the increased cost.

For the time being, many firms are considering these options as a way to save money: